The Effect of CEO personality traits on the financial performance of insurance companies in Kenya
Date
2022
Authors
Nyakundi, Mary
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
In Kenya, poor corporate governance practices have led to the collapse of big corporations among them insurance companies. Personality traits model leadership style, change management tactics, and investment decisions taken by CEOs thereby enhancing or inhibiting the financial performance of firms. CEO personality is thus likely to have a significant direct and interactive effect on a firm`s performance. Based on numerous reviewed personality studies knowledge gaps emerged on the effect of CEO personality traits on the financial performance of insurance companies in Kenya. This study sought to determine the effects of the five CEO personality traits (Emotionality, Extraversion, Agreeableness, Conscientiousness, and Openness to Experience) on the financial performance of insurance companies in Kenya. A descriptive correlation research design was employed and primary data was gathered using structured or closed-ended questionnaires from a sample of 34 CEOs and 88 other senior management staff. Descriptive statistical analysis, factor analysis, correlational analysis, and ordinal regression techniques were also employed. The results from the 34 CEOs show that CEO Openness and CEO Agreeableness had a significant positive effect while CEO Extroversion had a significant negative effect on the financial performance of Insurance companies in Kenya. The results from the 88 senior management staff show that except for CEO Openness and CEO Agreeableness, which had a significant positive effect the other 3 CEO personality traits had no significant effect on financial performance of insurance companies in Kenya. The study recommended effective top management training to improve personality traits crucial in the achievement of the organization’s goals and objectives. Additionally, the management of the Insurance companies can develop appropriate CEO appraisal mechanisms to identify, develop and apply effective personality traits with a significant positive influence on performance to precisely promote financial performance among insurance companies in Kenya.
Description
A Research thesis submitted to Strathmore business school in partial fulfillment for the degree of Masters of Commerce of Strathmore University